Protect UAW Retirees: Their Future is Our Future
UAW New Directions Movement October 21, 2005
COLLABORATION BETWEEN the UAW and GM, over 20 years in the making,
is well known and now accepted as SOP. Although rarely discussed openly,
its footprints are everywhere. A prime example is the current "tentative
agreement" which would force retirees to pay a bigger percentage of their
health care and active workers to pick up the tab. At the same time, fearful
of backlash from members, the union has filed a lawsuit preventing UAW
retirees from taking legal action against GM.
The current round of collaboration began in April 2005 after UAW
President Ron Gettelfinger told GM, "Don't Push Me." He assured anxious and
angry workers that he would not open the contract to alter health care
benefits and that GM could not unilaterally alter retirement benefits. He
promised to work within the confines of the contract. He then attended
secret meetings with Delphi, other major suppliers, and the Big Three.
After consulting with Wall Street analysts1 Gettelfinger did in fact open
the contract thus allowing GM to change health care benefits for existing
retirees. What GM could not legally do themselves, Gettelfinger did for them.
What is shocking about the lawsuit is that it makes the collaboration
so transparent. By getting a couple proxies to file a class action lawsuit
against GM (and providing lawyers), the union could both 'manage' the scope
of the suit and be declared the sole representatives of UAW-GM retirees. This
means retirees will not be able to file a class action suit of their own, nor
have an independent say in any proposed remedy. This set-up leaves the door
open for further cuts in retiree benefits.
The Detroit Free Press reported, "A statement from GM said the car
company 'supports this action.' GM and the UAW agreed, as part of the overall
tentative settlement announced on Oct. 17, 2005, that the UAW would seek court
approval. GM also agreed to work with the UAW to expedite such reviews and
approval. Today's action constitutes the initial step in implementing this
element of the agreement.'" [Detroit Free Press, Retirees Worry as UAW Seeks
Court OK, 10/19/05]
No wonder GM "supports this action." With the 'cooperation' of the UAW
GM is protected from UAW retirees after successfully altering their health
care benefits. This type of cooperation has a name, company unionism. It is
the policy of the Administrative Caucus.
UAW retirees should attend court proceedings in full force and demand
first, that their opinions be included in the suit, and second, that any
court approval of post retirement concessions be contingent on retirees'
right to vote.
Single-Payer National Health Care
What happened to the union's demand for GM to support a Single-Payer
National Health Care System? Why wasn't action on health care reform a
precondition to discussions on health care? Both the company and the union
understand the importance of a universal health care system. Both could
have lobbied Congress, built support in the working class, and showed that
unions aren't just for current members. All Big Three contracts with the
CAW state, " Publicly funded health care . . .has been a significant factor
in maintaining and attracting new auto investment to Canada." Furthermore
they pledge to lobby federal and provincial governments for it.
What accounts for the difference? Many of us would link it to the UAW's
collaboration/jointness model of unionism, something the CAW has resisted
for many years. So where does that leave UAW retirees and active workers?
If the UAW accepts the premise that workers should bear the burden of
a wasteful, inefficient health care system, what hope do less fortunate,
nonunion workers have? Gettelfinger says "Single Payer National Healthcare
has long been a goal of the UAW." But, these are water over the damned words,
meant to soothe and pacify the sleeping giant into silence. If rank and file
passivity were not the goal, the UAW would promote national healthcare as
the best solution for all working people not with words, but with actions.
Instead of forcing the Big Three to demand Universal Health Care as the
logical solution to their cost differential with foreign automakers,
the International is honing the corporate ax against workers.
Did Wagoner and Gettelfinger attend the same sugar coated seminar, or
did they simply get their stories straight? Wagoner told the Associated Press,
"Health care costs in this country are out of control. We would really like
to see much more focus and leadership from elected officials especially in
Washington." His words belie his actions.
UAW members should not let GM and the other auto companies make them
pay for mismanagement and the inexcusable failure to conduct business in a
socially responsible way. For UAW members, active and retired, this latest
product of the collaboration/jointness model of unionism puts us on another
'slippery slope' of unwarranted givebacks. Does anyone believe it's the last
time, and that they won't be back for more? On behalf of themselves and
all American workers, UAW members should reject this assault on the hard-
fought gains of retirees.
UAW members should proceed without concern for corporate America (GM),
but should proceed with deep concern and utmost diligence for the well-being
of America's working class. We urge UAW members to vote against these
concessions first and foremost to protect retirees, who not only sacrificed
for our well-being, but who do not have the right to vote on contracts. If
we open the door to concessions on retiree health care, then we set a
precedent for more concessions in the future. The UAW lawsuit against GM
doesn't prevent cuts in health care for retirees, it endorses the UAW's
collaboration with corporations in executing changes the company wants.
Active members jeopardize their own security by endorsing such a policy.
There are some fundamental questions that the International should
answer about how this plan affects members.
It is important to see the whole agreement and have time to digest it.
The Highlights, as past experience has shown are not sufficient.
A major change that has already been announced is that the defined
benefit will be converted to a "defined contribution VEBA". What is the
difference between defined benefit and defined contribution and how will
it affect members?
Who will control the VEBA? In the past GM has taken money out of the
VEBA for capital investments. What happened to the original VEBA?
GM is committed to pay one billion into the VEBA in 2005, 2006, and
2011. What happens in the gap between 2007 and 2011? A new Agreement with
new concessions? More COLA diversions? Is this a set up for 2007?
If benefit claims exceed contributions what happens? Will costs be
passed onto retirees? The maximum annual increase for out of pocket expenses
would be 3% per year for retirees. Does that mean 18% by the expiration
Will there be limits to the plan? For example, will the plan
discriminate against the mentally or chronically ill or people with rare
diseases by limiting or denying coverage? Will there be a cap on total
payouts? Who will administer this plan? Is this another jointness plan
to provide job security for International appointees at the expense of
Why is COLA so Important?
The major reason autoworkers in the Big Three make above average wages
is cost of living. There were many years when we did not receive raises
despite productivity gains. But thanks to retirees who struck GM in 1970
for ten weeks, our wages rose with inflation. When inflation went through
the roof during the Reagan years, our wages rose with the rate of inflation.
While non union workers lost spending power due to inflation our standard
of living was maintained. COLA is one of the most important factors in our
contract. COLA ensures that we will be able to pay our bills when gas and
heating prices rise.
As former New Directions leader and UAW Local 599 President, Dave
Yettaw said, "The corporations are playing chess, but the UAW is playing
checkers." Which is to say the companies not only have a long term plan
to shift the burden of health care costs onto workers, they want to
eliminate COLA in the bargain. COLA Diversion to pay for health care
and other benefits is an alarming trend.
COLA Diversion is a code phrase for money diverted from wages to offset
the cost of Health Care. Below is a short history of COLA diversion.
COLA Diversions for Health Care:
1964.... 2 cents per hour
In simple English COLA Diversion amounts to a health care premium.
Not adjusting for inflation, or accounting for overtime, or calculating
Travel COLA concessions, the accumulated COLA diversion amounts to a
minimum of $1,500 per year.
On top of that, in the 2003 Agreement 2 cents per quarter from COLA
(8 cents a year) was diverted to pay for pensions. These diversions add up
over time and represent a permanent loss. We not only accepted a reduction
in pension improvement, we paid for it. On top of that in the 2003
Agreement the rate of health care inflation was deducted from the COLA
formula. With all these deductions we are rapidly approaching a zero cost
of living adjustment.
Now GM wants another dollar an hour. Where will it end?
Does anybody but GM make out Here?
"This is opening the door to a whole new era of collaboration between
labor and management," said David Cole, auto analyst. Is Cole aware of
a new layer of jointness/collaboration another class of UAW self-serving
bureaucrats lining up jobs, managing a VEBA, and administering a health
care plan for UAW members? There is every reason to think this might be
the case. Remember how joint funds grew from a nickel to nineteen cents
per hour, plus up to five dollars for overtime? How is it that during all
this talk of concessions we never heard of any concessions in joint funds?
How is it GM can afford joint fund donations of nineteen cents per hour
but not health care?
Things weren't always this way in the UAW. Before collaboration
members and officers aligned themselves for the well-being of a nation,
and were willing to fight for the greater good of all working people.
Today's retirees were those workers who fought for justice. They
deserve our support. They won pension, health care, and cost of living
for us. If we abandon retirees now, we cast our fate with the jackals.